Comments for YouTube Continues to Destroy All Competitors in Declining Video Market

YouTube Continues to Destroy All Competitors in Declining Video Market

2008-06-26T16:31:19Z

YouTube's huge lead in market share over other online video sites continues to get bigger, even as the over all video viewing market continues a decline. According to traffic analysts Hitwise, YouTube now sees 75.43% of traffic to the online video category; that's up 26% from it's May 2007 marketshare of 59.95%. The nearest competitor is still MySpaceTV, which was down a whopping 44% to 9% marketshare. (Full chart of top 5 sites below.)

In April we reported that YouTube's dominance in online video was bigger than Google's dominance in search (67%). The new Hitwise numbers raise a number of questions for us.

]]> Questions

Hitwise reports that overall video viewership in May of this year fell 9% compared to May of last year, but times on site grew 6%. That's strange. We've asked whether the rapidly growing Hulu is included in this batch of numbers and will update this post when we get a reply. (Update: Hitwise says that Hulu is now the 13th most watched video site and is seeing consistent growth each month.) Could it be that last year saw a large number of people checking out online video for the first time, only a certain percentage of them found that they liked it but those people are now watching more than before? If readers have any theories why the video market is declining in absolute number of viewers, we'd love to hear them.

YouTube's huge dominance over a market that includes a wide variety of different video sites, each with different communities and feature sets, probably does not bode very well for innovation in the sector. We'd love to see more people checking out innovative services like Metacafe, Blip.tv and others. We wrote about the top video content producers in the world yesterday, many of which are bigger in places other than YouTube. Smaller up and comers outside of YouTube deserve some attention, too.

Comment from Trevor Plantagenet on 2008-06-26

2008-06-26T16:43:50Z

I like the idea of online video, but all the major cable operators have really good on-demand offerings now. The percentage of people who rely on internet video as opposed to their television is really small, and not growing.

Comment from Jim Kukral on 2008-06-26

2008-06-26T17:47:53Z

The most interesting thing here that I noticed is that Veoh.com coming and taking the #5 spot. Didn't see that coming. Nice work Veoh.

Comment from rickg on 2008-06-26

2008-06-26T17:58:58Z

Yes, I think people checked out Youtube last year and in 2006 when it really became mainstream. Some continue to, but only a certain set of people have the inclination to check out wacky videos very much and that's most of what's there. For video entertainment it's still too easy to get a DVD, watch TV live (or DVRed) or hit up the on demand offering of a cable operator. I also wonder whether there's a decline in people sending video links to their friends in email.

As for other offerings 'deserving' attention... maybe. But they need to be more than a me too service and that more needs to be apparent early on. If I only get that 'more' after participating in the community for awhile... what's a barrier. And even cool features might not be enough. For example, I like the tagging I can do in Viddler, but if people overwhelmingly watch short clips... is it that useful? It could be great for a political site to annotate clips of the candidates, but that's a niche use.

What we're seeing is the fallout from the "OMG, Google bought Youtube for HOW MUCH? Let's clone that and see if we can sell to someone!" phenomenon. If Youtube = Myspace, then then someone needs to become the Facebook of video and to do that they need to attract a different demographic or provide something that Youtube's audience isn't interested in. Just being the Nth site where people can watch short clips is a market that Youtube's got sewn up. Change the game if you want to succeed.

Comment from James Lewin on 2008-06-26

2008-06-26T18:21:12Z

Marshall -

Do you think the Internet video market is declining?

Or are Hitwise's stats interesting numbers that don't really have much to do with how people are using online video?

Comment from Jason on 2008-06-26

2008-06-26T18:54:47Z

YouTube is blocked where I work (along with a bunch of video, music, and social sites). It wasn't blocked until a lot of people were using it and straining our bandwidth. Certainly other companies do the same and I wonder if that has a significant impact.

Comment from Schlomo Rabinowitz on 2008-06-26

2008-06-26T19:06:13Z

I think Veoh only does this well because of the wealth of copyrighted material that is illegally hosted over there.

Comment from Curt Kobain on 2008-06-26

2008-06-26T19:34:46Z

What happened to Tudou?

Comment from Shelly Jacobs on 2008-06-26

2008-06-26T19:46:39Z

My partner and I own 3,000+ movies not yet webcasted, Saying that, we've been approached by most everyone, all wanting our content for free to "make their bones" wherein all they are willing to do is share PPV, subscription and/or ad revenue, if any, NOT equity in their biz, as if they are opening up a dept store and wanting it fully inventoried only on consignment wherein they pay $0.00!

Comment from D. on 2008-06-26

2008-06-26T19:49:20Z

So basically Google made a very wise decision when buying YouTube. Despite the fact that it gets more traffic than Google's search.

I find this a bit hard to comprehend, seeing as how I'm simply not a fan of watching online videos.

Comment from Marshall Kirkpatrick on 2008-06-26

2008-06-26T19:58:26Z

Great discussion everyone, thanks for your thoughts.

James, I don't know if the video market really is shrinking, but that's what hitwise claims. What do you think? I could be convinced either way.

Comment from gregory on 2008-06-26

2008-06-26T21:17:55Z

were the x-rated channels left out, or do they really score lower than, say, veoh?

Comment from Technology Slice on 2008-06-26

2008-06-27T02:00:30Z

I don't think anyone can match YouTube for video. They continue to grow at a rapid pace.

Comment from Ian on 2008-06-27

2008-06-27T07:26:54Z

There seems to be a growing demand for smaller niche video environments that are contextual and meaningful both for the creator and the viewer.

Less viewers, better content.

Comment from Fred Buckley on 2008-06-27

2008-06-27T13:02:44Z

I don't think that the video sharing sites are on decline, just that there are so many new start-ups it has just become an increasingly difficult task to keep up with them! I think that the video-centric internet is shifting a little and my bet is that it would be good to move these sites away from consumers and aim that at businesses for communications.
http://www.brandstation.tv/

Comment from angela on 2008-06-30

2008-06-30T22:07:09Z

I enjoy internet videos to watch videos that are rare or things of that nature, but I much prefer to watch them the 'old fashioned' way, the television. Somehow, watching a small box video on close on a computer screen isn't the same.